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Copyright 2009 , ITD Marketing, ITC , Bangalore.

Sales & Distribution Strategy : Packaged Snack Food CategoryITC BINGO

Hybrid Order Booking Model Implementation, Results & Scale up

Harshvardhan Singh Chauhan

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Copyright 2009 , ITD Marketing, ITC , Bangalore.

Presentation Plan

•Understanding the Sales And Distribution Chain

•Tracking Sales loss Across Bangalore

•Tracking the variation in supply

•Opportunities to avoid the Sales •Order Booking Model

•Hybrid Model Solution

•Pure Order Booking Model

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Copyright 2009 , ITD Marketing, ITC , Bangalore.

Understanding the Sales And Distribution Chain

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Copyright 2009 , ITD Marketing, ITC , Bangalore.

Processes in the chain

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Copyright 2009 , ITD Marketing, ITC , Bangalore.

•ECD•Stock at hand•Supplies•Reserve Stock•Cash at hand

•Stock at WD point•Route Demand•Carrying Capacity

Inefficiencies in Loading

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Copyright 2009 , ITD Marketing, ITC , Bangalore.

•Prefers high selling SKU’s•Prefers more credit & variety•Induces Sales Cannibalization

•DS pushes available stock•Maximize sale value , bill cuts, lines cut•Retailer’s capacity to pay

Dynamics involved in a Sales negotiation

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Copyright 2009 , ITD Marketing, ITC , Bangalore.

•Stock Check•Hanging Ladis•Arranging on rack•New Stock Rotation on rack

•Expired stock•Air out Packets•Unsold / Obscured packets in stores•Lost visibility

Inefficiencies in Merchandising

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Copyright 2009 , ITD Marketing, ITC , Bangalore.

• High Average Daily Actual Sales of Rs.5020•Low Billed Outlets Coverage 30.71% •Excess Stock 60.43%

•Expected Daily Sales of Rs.7832 per DS•High Average Daily loss of Rs.2812 per DS•Huge Demand Supply Mismatch •Stock Unavailable 99.99% •Stock out 0.01%•Sales loss of 35.5% Across 112 routes , 4200 + outlets , 8 WD points

20%26%

27%37%

25%

33%

31%32%

Tracking the Sales Loss

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Copyright 2009 , ITD Marketing, ITC , Bangalore.

Variation in demand and supply for January’09

•Reserve stock of five days was taken•ECD is prepared by the Area Executive•Total Variation of 83%

•10 variants supplied•Three variants supply was only 50% of demand•Two variants supply of more than 100%

•Only Three variants supply was close to demand•91.38% excess supply

•Four variants were under supplied•One variant had close to 100% excess supply

ECD + Reserve

Supply + SOH

Inefficiencies in Supply

10Copyright 2009 , ITD Marketing, ITC , Bangalore.

Cover Day Report Analysis for MA Associates & Rushub as on May 30th ‘09

79 KGs of transfer 380 KGs of transfer 212 KGs of transfer

Rushub

MA

Was Sales loss avoidable?

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Copyright 2009 , ITD Marketing, ITC , Bangalore.

HYBRID MODEL WEEKLY PLANHIGHLIGHTS

•Two routes clubbed together in one day•Alternate day cycle of Order Day (OD) and Supply Day(SD)•Visibility of DS is just doubled per route•22 day average : Inc Sales 25.64% ,Inc Bill Cuts 70.33% , Inc Lines Cut 44.31% •K4 costs reduced by 40.20% : Saving of Rs.8 in servicing per outlet

Sales 48.76%Bill Cuts 78.5%Lines Cut 40%

Sales 57.89%Bill Cuts 84.9%Lines Cut 54%

Sales 39.49%Bill Cuts 82.6%Lines Cut 58%

The Order Booking Model – Rushub

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Copyright 2009 , ITD Marketing, ITC , Bangalore.

HYBRID MODEL WEEKLY PLANHIGHLIGHTS

•Two routes clubbed together in one day•Alternate day cycle of Order Day (OD) and Supply Day(SD)•Visibility of DS is just doubled per route•25 day average : Inc Sales 23.81% ,Inc Bill Cuts 112.34% , Inc Lines Cut 45.29% •K4 costs reduced by 40.20% : Saving of Rs.8 in servicing per outlet

Sales 16.98%Bill Cuts 101.5%Lines Cut 47%

Sales 37.89%Bill Cuts 156.9%Lines Cut 40%

Sales 39.49%Bill Cuts 179%Lines Cut 58%

The Hybrid Sales and Distribution Model – MA Associates

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Copyright 2009 , ITD Marketing, ITC , Bangalore.

MODEL WEEKLY PLANHIGHLIGHTS•Four routes covered by 4 DS on OD•15-18% more outlets added in each route•Increased Coverage per route•Two supply vehicles used for 4 routes on SD•22 day average : Inc Sales 15.91% ,Inc Bill Cuts 25.4% , Inc Lines Cut 25.33% •K4 costs remains same at Rs. 2600/- for four days

Sales 15.91%Bill Cuts 25.4%Lines Cut 25.33%

The Pure Order Booking Model – Emerald

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Copyright 2009 , ITD Marketing, ITC , Bangalore.

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